ARTL Stock: Artelo Biosciences Climbs on Analyst Initiation

Artelo Biosciences Inc (NASDAQ: ARTL) is screaming for the top this morning, trading on gains of more than 60% and squeezing the shorts out of their positions after Ladenburg Thalmann & Co initiated the stock with a Buy rating. Here’s what’s going on:

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ARTL Initiated by Ladenburg Thalmann & Co

As mentioned above, Artelo Biosciences is having a strong start to the trading session in the premarket hours this morning after an analyst initiated coverage. 

Michael Higgins of Ladenburg Thalmann & Co. initiated coverage on ARTL stock with a Buy rating. The price target placed on the stock is $7 per share, representing the potential for significant gains, especially considering the last close price of $1.63 per share. 

The initiation seems to have been the catalyst for a short squeeze. Keep in mind, a large percentage of the volume seen on ARTL stock is short volume. Moreover, the stock trades with an ultra-tiny public float of just over 13 million shares. That means that there’s not a huge supply of shares on the market. As a result, the short squeeze currently taking place has the potential to lead to gains in multiples. 

What Is Artelo Biosciences

Artelo Biosciences is a clinical-stage biotechnology company that’s focused on treating conditions by modulating the endocannabinoid system, a promising field of study in medicine.

The company is in early stages, but has three promising assets, one which is currently in the process of Phase 1 development with the other two being preclinical. 

At present, ARTL is targeting cancer and pain indications under the belief that modulating the endocannabinoid system will lead to better outcomes for these patients.  

What Analysts Think About ARTL Stock

Analysts seem to love ARTL stock. While there aren’t a ton of analysts covering the stock, in fact there’s only two to date, both of the analysts covering the stock have a positive opinion. 

In fact, both analysts rate the stock a Buy with a price target of $7 per share, suggesting the potential for gains in multiples. 

Keep in mind, it’s never a good idea to blindly follow the opinions of analysts. However, their opinions are a great source of validation for your own research. 

Risks to Consider Before Buying ARTL Stock

If you’re considering buying ARTL stock, or any other stock or financial instrument for that matter, you’re going to have to be willing to accept the risks that come along with the investment. After all, there’s no investment without risk. When it comes to Artelo Biosciences, the most significant risks to consider include:

  • Clinical Stages. Artelo Biosciences is currently in early clinical stages of development. This means that the company is at the mercy of the data. Should the data be positive moving forward, significant gains are likely ahead. However, if the data is negative, we could see significant losses. 
  • Profitability. As a clinical stage biotechnology company, ARTL doesn’t generate any revenue or profits. As a result, the company is dependent on the cash on its balance sheet. If that’s not enough to get it to profitability, it will likely look to raise funds in the public market, leading to dilution of value for existing shareholders and likely declines. 
  • Penny Stock. ARTL is a penny stock. Penny stocks come with increased risk as these stocks represent companies with relatively unproven business models. Moreover, these stocks experience high levels of volatility, making entrance and exit decisions difficult and opening the door to potentially significant short term losses. 

Final Thoughts

Although risks are always present in any investment opportunity, as they are with Artelo Biosciences stock, the stock seems promising. The fact of the matter is that two highly trusted analysts are now weighing in with positive opinions. 

At the same time, ARTL is studying what endocannabinoid system modulation, which many scientists believe holds the key to the treatment of various cancers, sources of pain, and several other indications. 

All in all, things are looking up for ARTL stock.